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Apple Awarded $1 Billion in Patent Infringement Damages From Samsung

A federal court jury found that Samsung infringed on Apple's mobile device patents in the design of its tablets and smartphones and directed Samsung to pay $1.05 billion in damages.

A federal jury in San Jose, Calif. awarded Apple $1.05 billion in damages for patent infringement by rival smartphone and tablet maker Samsung.

In a session that took more than a half an hour the afternoon of Aug. 24, a court clerk read dozens of rulings on multiple counts of infringement regarding a variety of Samsung products. In most, but not all cases, the Samsung products were found to have infringed on Apple's iPhone smartphone and iPad tablet computer.

Samsung products found to have violated Apple patents included the Samsung Galaxy Tab and Galaxy 10.1 tablets and such smartphone models as the Captivate, the Galaxy S line, the Fascinate and the Epic 4 G. In the case of most patents, the jury ruled that Samsung's infringement of them was "willful."

If the jury verdict is upheld after the inevitable appeals, the $1.05 billion damages award has the potential to take significant bite out of Samsung's cash reserves, which totaled $23.8 billion according to its second quarter earnings report released on July 27.

Further reading

The verdict was handed down by a jury in U.S. District Court for the Northern District of California in San Jose after a three-week trial and three days of deliberations.

Neither Samsung or Apple representatives spoke to reporters after the verdict, but Samsung issued a statement.

"Today's verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices," Samsung's statement said. "It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies."

The statement also asserted that "this is not the final word in this case," while not specifically stating whether Samsung plans to appeal these verdicts.

However, Samsung noted that some of the rulings and appeals other Apple patent lawsuits in the U.S. and in courts overseas have actually gone against Apple.

Apple sued Samsung over multiple infringements of its patents on the iPhone smartphone and the iPad tablet computer, seeking at least $2.5 billion in damages.

But during the trial, Samsung made counterclaims that Apple infringed on some of its patents and also tried to invalidate some Apple patents by arguing that they were based on "prior art," meaning that the innovations Apple believed were unique were already on the market.

Apple, on the other hand, presented evidence that it claimed show Samsung was obviously copying its design for the iPhone. Its lawyers produced several Samsung smartphones released before the iPhone came out in 2007 that were of various shapes and sizes, but that after the iPhone came out, new Samsung smartphones began looking more like the iPhone.

Apple also introduced a 132-page internal Samsung document itemizing multiple features of the iPhone and noted how Samsung models in development at the time fell short of the design of the iPhone.

After the verdict was read, U.S. District Judge Lucy Koh, asked the jury to reconsider apparent inconsistencies in two of the verdicts where the jury found that Samsung had not infringed on an Apple patent, but awarded damages anyway. The jury reduced the damages in those two verdicts to zero. The change reduced the final damages award to $1,049,343,540.

The Apple vs. Samsung case has been closely watched by many in the Silicon Valley technology community because of its implications for competition in the multi-billion dollar mobile device market.

Samsung and Apple are the first and second best selling smartphone vendors in the market, respectively, according to figures from the research firm IDC. In the second quarter of 2012, Samsung smartphone sales jumped by 173 percent over the second quarter of 2011 to 50.2 million units.

Apple's sales grew by 27.5 percent to 26 million units. The next two vendors on the list, Nokia and HTC, both suffered double-digit sales declines as customers gravitated to the top-selling Samsung and Apple devices.

Apple, however, holds a substantial lead in the sale of tablets according to a report from IHS. In the fourth quarter, Apple held a 62 percent share of the global tablet market, with Samsung's Galaxy Tab line a distant second at 6.4 percent.